Having a baby is undoubtedly one of the most thrilling experiences of your life! Not only do you welcome new members into your family, you are also stepping into a whole new lifestyle with different routines and of course new financial responsibilities. Let’s face it: babies are expensive. From diapers to day care, there are many costs to consider. But with the right planning, you can confidently grasp how much you can save for your baby, and you’re still on track with your financial goals!
What I did to save my twin babies
As a twin mom, I can directly convey that babies are incredible blessings, but they also come with a whirlwind of change. Diapers, formulas, clothing and countless other essentials can sum up quickly, not to mention the big costs of medical costs, childcare, and potential time off.
When I found out I was expecting twins, I knew I needed extra preparation. This meant that two babies at a time had doubled the diapers, doubled the supplies and doubled the unexpected costs. I realized that if you don’t have a solid financial plan in place, the joy of welcoming a baby can easily be hidden by the stress of managing costs.
So I spent some time mapping our finances ahead of time. We created a budget that takes into account all new costs, from hospital bills to the ongoing costs of caring for two infants. I looked into my savings plan, looked into the best deals on baby gear, and even a little cushion was considered for the inevitable surprises parents bring.
By doing this, I was able to save money, prepare for future expenses and avoid being caught off guard.
When the twins arrived, making this financial plan made a huge difference. The peace of mind that we knew our finances were under control allowed me to be more present and enjoy the experience of being a mother rather than being consumed by money worries.
If there is one advice you can give to your expected parent, it is this. If you can, plan your finances in advance. It doesn’t eliminate all the challenges, but it greatly reduces the financial burden and gives you the freedom to fully embrace the incredible journey of parent-child relationships.
How much do you need to save for your baby?
If you’re wondering how much you should save before your baby arrives, let’s take a quick look at some rough estimates on what your core costs are.
Medical Costs: Starting from $2,655
Even with insurance, there will likely be out-of-pocket costs for all prenatal visits, ultrasound, actual delivery, post-delivery care and visits. Additionally, costs vary greatly depending on the type of delivery.
According to data on health costs related to pregnancy, childbirth, and postnatal care by HealthSystemTracker.org. For pregnancy resulting in a vaginal birth, the total cost averages around $14,768, and if you have insurance, you will usually be paid about $2,655 at your own expense.
For C-section delivery, the average cost increases to around $26,280, and if you have insurance, about $3,214 will come out of your pocket.
Baby Gear & Nursery Setup: $1,500 – $3,500
Preparing a nursery may add up quickly. I have a crib, mattress, a changing table and a dresser. This can easily hit more than $1,000.
Next is the car seat and stroller combo. This allows you to average between $300 and $800 (or more depending on your preference). Plus, you will need clothing and extras such as baby monitors, swings, diaper bags
Diapers and Feeding Supplies: $80 – $230 month
Just a diaper and wipe will bring you back from $70 to $80 a month. If you use the formula, then expect to spend a bottle and a breast pump if you’re pumping it in addition to that. (Please note that you may be entitled to a free breast milk pump through insurance).
Nanny or babysitter: $200 a month
It may take some time for you to run errands, get your hair done, or make your date nights on maternity leave or before you put your baby in nursery. Using family and friends to support is a great idea, but if you can’t use it, you may need a babysitter.
Typically, nannies and babysitters cost between $15 and $20 per hour.
Daycare: $1,000 – $2,500 month
If you’re planning on returning to work, parenting is a big thing. The cost of daycare varies greatly depending on where you live, but even if your income can cover it, it’s good to have some money.
Emergency Fund Cushion: $2,000 – $3,000
Living with a newborn can be full of surprises, so spending a little extra for unexpected costs like medical costs and home repairs can help you feel at ease.
The smallest ballpark to save babies? ~$8,000
A good ballpark to save babies, including the lowest average cost above, 3 months of diapers/feed supplies, and 3 months of nanny/babysitter, is around $8,000. This does not include daycare costs.
Again, these are rough estimates and your personal situation may vary as there are many factors including the final cost of medical expenses.
If you live in a more expensive area, or if you have a special preference for what you want to buy for your baby, you may need to save a little more. Or maybe you don’t need a nanny because of family help.
Therefore, it is important to do your finances and your needs the best possible for your unique situation. Starting early and saving regularly will help you achieve your savings goals without too much stress!
15 important tips to save money for your baby
That being said, let’s dive into practical tips that will help you manage your money when preparing small things.
1. Adjust your budget to include your baby’s expenses
As soon as you know you have a baby, it is a good idea to take a closer look at your current budget. Check where you can trim the fat. See if it cuts down on eating out, subscription services, or unnecessary splurges.
But don’t stop there! Once the baby arrives and is able to live with the baby, you may find an opportunity to bring in extra income. You can do this.
A proactive approach to adjusting your budget and increasing your income will help you ensure you are financially prepared for the additional costs that come with your new baby. Plus, it’s on track to your larger financial goals.
2. Start savings for immediate baby expenses
Babies are costly and in a short and long term. Even if you’re lucky enough to receive many essentials in your baby shower, you’ll still need a budget for ongoing costs like diapers, formulas, and childcare.
Start throwing away your money now to cover these costs. Create a “baby budget” to handle unexpected costs that may pop up. Trust me, this will help relieve any financial stress once your little one arrives.
3. Practice living on one income
If you are in a double income household and are thinking of having one parent stay home with the baby after maternity leave, start practicing your life with one income now. Adjust your current expenses so that only one salary can cover all your needs and save another.
This not only helps to accumulate savings before the baby arrives, but also gives a good idea of ​​whether living on one income is sustainable for the family in the long run.
Of course, not everyone can afford to live on one income. That’s fine! Some parents will continue to work on maternity leave or return to work soon. The key is to plan ahead to find the best one for your family.
4. Plan your long-term baby expenses
Once the baby arrives, the financial planning never stops. As your child grows, so does your costs. Think about school supplies, extracurricular activities, and ultimately college savings.
To avoid debt, start securing your money now for these future expenses. Consider opening a 529 university savings plan or another type of account dedicated to your child’s education. This is a great gift for your kids and helps them avoid student loan debt.
It is important to balance your child’s needs with your own financial goals. While this may mean saving a little in some areas, keeping your spending in mind and looking for ways to save can make a big difference.
5. Check maternity leave and insurance coverage
Understanding maternity leave and insurance coverage is key to financial planning. How long during your holidays and what portion of your salary will you receive? If your vacation isn’t fully paid, start saving now to make up for the difference.
Also, get health insurance and check what’s covered in postnatal care. For example, how much will it be covered for delivery and hospitalization of the vagina and c-section? You need to know what costs to expect when preparing your baby!
6. Stop baby shopping until after the baby shower
It’s easy to start buying all these cute baby items the moment you get excited and discover that you’re looking forward to as a first-time mom. However, make sure you wait until after the baby shower before hitting the store. You will probably receive many essential items as gifts. This means you can save money for other important expenses.
Create a thorough registry with everything you need, from diapers of various sizes to big ticket items such as strollers and car seats. After the shower, you can go outside and buy anything you haven’t received.
7. Renew your life insurance
There are small things along the way, so it’s important to renew your life insurance and include it as a beneficiary. If something happens to you, life insurance is essential to your family’s financial security. Because it covers costs such as education and providing supplemental income.
Make sure your insurance provides sufficient coverage to meet the needs of your family. Consider exploring options to talk to a license agent.
8. Create or modify your estate plan
It’s not the most hilarious topic, but it’s important to plan your estate when preparing your baby. Real Estate Planning ensures that your assets will be distributed according to your wishes. And that’s especially important as you have kids to take care of and consider.
If you already have an estate plan, please update it to include a new baby. This also provides a good opportunity to review your plans if you are thinking about having more children in the future.
9. Become a savvy shopper
When you’re preparing your baby, learning how to shop smartly can save you a lot of money. Babies grow faster, so consider buying second hand clothes and other items. You can also save by purchasing large quantities by using coupons and using the cashback app.
Start practicing these frugal habits now, so by the time your baby arrives, you can find a deal and keep costs down.
10. Emergency fee planning
Babies can be unpredictable and it is important to set up emergency funds to cover unexpected costs. This can be anything from medical expenses to having to replace temporary lost income.
Set your goal of securing 3-6 months’ worth of living in a separate savings account. This cushion provides peace of mind and financial security as you navigate the early stages of your parent-child relationship.
11. Explore Flexible Expense Accounts (FSAs) and Health Savings Accounts (HSAs)
If your employer offers flexible spending accounts (FSAs) or health savings accounts (HSAs), consider taking advantage of these options.
FSA allows you to reserve pre-tax dollars for medical expenses. This can be a major help to the costs of prenatal care, delivery and baby-related health care needs.
HSAs also offer tax benefits, which can be used for medical expenses if you have a high health plan. Using these accounts wisely will save you money on healthcare costs.
12. Explore parenting options early
Parenting can be one of the biggest costs for new parents, so it is a good idea to start evaluating options early. Whether you are considering helping out daycare, nannies or family, comparing costs and availability in advance can help you budget properly.
Some parents may also explore nannies sharing arrangements with another family to reduce costs. Knowing your childcare plan in advance will help prevent last-minute scrambling and prepare you financially.
13. Consider escape of the hand and use free resources
When it comes to baby gear and clothing, downing your hands can be a lifesaver. Don’t hesitate to accept items that have been gently used by friends and family, especially clothes, toys, baby furniture.
Many communities also have free resources such as parenting groups and online marketplaces, where you can find items for free or for a small fee. These resources can significantly reduce your baby’s spending on essentials.
14. Start your baby registry strategically
When creating a baby registry, think about what you really need after the first year. This way you can prioritize seeking big ticket items such as cribs, car seats, and strollers.
Some parents also choose to register for the “diaper fund” or contribution to future childcare costs. A well-thinked registry will help you save money and get what you really need.
15. Reevaluate your debt repayment strategy
If you have existing debts, it may be worth reassessing your repayment strategy before your baby arrives.
Consider focusing on paying off the highest possible profitable debt before costs increase. This way, once the baby is born, you will have more economical flexibility.
Additionally, you can explore lower interest rate refinance options.
Expert Tip: Start saving consistently for your baby: it will be totaled!
One of the best tips you can share from your personal experience is to start small but match your savings.
When I found out what I was expecting, I set up an automatic transfer from my checking account to another “Baby Fund” savings account each week. Over the course of months, it quickly grew without me realising.
By the time the twins arrived there was a lovely little cushion to cover all the unexpected costs that seemed to be appearing out of nowhere. The key is to start as soon as possible and make it a regular habit. Even a small amount can make a big difference!
How much money should I save before I have a baby?
There is no perfect answer for every size, but it’s good to save at least 3-6 months’ worth of living before your baby arrives.
This emergency fund will help cover unexpected expenses, such as medical expenses and work holidays. Plus, consider putting extra cash aside for your immediate baby’s needs, such as diapers, formulas, baby gear and more.
If possible, save enough savings to cover income gaps during maternity leave, especially if you’re not fully paid.
What is the budget for a baby per month?
Monthly costs for a baby vary greatly depending on your situation, but a typical estimate is around $1,000 a month.
This includes diapers, formulas, clothing, childcare, and more. If you are breastfed and have free or affordable childcare, the costs can be lower.
However, if you are using a formula or paying for a daycare, the number can be easily summed. We recommend starting tracking these costs early so you can adjust your budget as needed.
How much savings does a baby need?
Again, it really depends on your particular situation, but it’s important to have a solid emergency fund (3-6 months’ living expenses).
Plus, saving another “baby fund” for these big upfront costs, such as nursery setups and baby gear purchases, can help. This really helped me as I was preparing for the twins.
You can aim to save around $5,000 to $10,000 in particular for baby-related costs, but this can vary depending on what you already have and what you still need to buy.
What is the best income to have a baby?
A “good” income really depends on where you live and your lifestyle. There’s no magic number, but it’s ideal to get a stable income that covers the cost of living where you have room to save.
$50,000 a year may be enough, especially if housing costs are low and budgets are tight. For others in the high-cost area, over $80,000 may feel more comfortable.
The important thing is to ensure that your income covers your needs. It is also worth considering your long-term financial goals and how adding your baby to the mix will affect them.
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Use these tips to save your baby!
Planning your baby financially will help you and your child achieve long-term success. Start managing your money wisely, create a solid financial plan and make sure you have the right insurance coverage to avoid set breaks.
It’s always a good idea to be prepared for your first baby, add another small thing to your family, review your financial situation and make the necessary adjustments. Remember that every family’s needs are different. Stick to it when you find the best budgeting method for you and understand how much you can save for your baby.
With proper preparation, you can enjoy the excitement of welcoming a new baby without the stress of financial worries.